At the PwC Federal Budget breakfast this morning at the Brisbane RNA Showgrounds convention centre, popular finance commentator Peter Switzer gave an entertaining and informative address on last night’s Federal Budget, which he labelled the Blackadder Budget, because a cunning plan is afoot. In Switzer’s view, it is a cunning plan that is designed to make Joe Hockey appear like a fiscal genius. Switzer was very persuasive in his view that the Budget forecasts on economic growth are conservative and the Government could actually achieve much better budget outcomes, including an earlier return to surplus. Let’s hope so.

Also notable were presentations by:

Queensland Treasurer Tim Nicholls, who wasn’t happy about the future reductions in health and education funding relative to the previous baselines, and noted he would take up the fight to Canberra for additional funding; and

former PM John Howard, who agreed with the PwC CEO and Tax Partner that Australia needs fundamental tax reform (e.g. raising more revenue from the GST), and who memorably noted that “context is everything” when explaining his decision in the early 2000s to remove fuel excise indexation, a decision reversed in last night’s budget (N.B. the context Howard was referring to was the Government having just implemented the GST and community concern that people were then being unfairly taxed at the bowser).

PwC has made the slides for its Budget Breakfast available on its website.

A big thank you to Denise Morton from Effective Governance for having invited me along to the breakfast.

Finally, 4BC today made my interview on the Federal Budget with Ben Davis from yesterday afternoon available on its website (you’ll have to scroll down the page a bit to find it, however):

4 Responses to PwC Breakfast on the Blackadder Budget – a cunning plan is afoot

Very interesting slides – I am sure the presentation would have been entertaining and insightful.

The Tax Effect slide 14 put the budget problem into perspective, with the collapse in revenue around 2009 – 2010.

To find the rort – follow the money I say.

I couldn’t help notice the ‘solid revenue growth’ announced quietly by the Commonwealth Bank yesterday, resulting in a Net profit of $2.2 billion for the first quarter. Shortly after NAB, ANZ, Westpac, Suncorp , etc announced similar profit growth.

Seems like tax-payers are really taking advantage of low interest rates, and negative gearing for investment to generate these massive bank profits.

The psychology of these decisions could fuel a interesting discussion on rational/ irrational taxpayer behaviour – seems like taxpayers are already well ahead of the game on ‘self reliance’ and ‘ending the age of entitlement’ .

Tax payers are voting with their cashflow on reducing government spending, waste and reliance on handouts . Seems they would much rather pay interest to the banks on loss making investments, than give up to 50 % of their wage to the government as tax to waste on the latest ‘sure to fail ‘ government scheme.

I suspect all these near-geared assets will eventually become cash-flow positive, and capital gains free in super funds, hopefully to fund the years between the super access – pension access age gap.

It is a long time since I’ve watched Blackadder, but I hope Peter Swizer’s Blackadder comparisons are only half right. Why? Read on and watch the youtube clip.

The cunning work of Blackadder (a.k.a. Joe Hockey) usually required implementation (or spending) to be undertaken by Baldrick (a.k.a. any industry, infrastructure, or regional development cabinet minister).

If we follow through on the Blackadder comparisons, the outcomes are still like this…….